S&Ps’ X-Maz present: S&P to update bank credit ratings within 3 weeks

S&P Pre-Announces The Bank Christmas Massacre
18 November 2011, by Tyler Durden (Zero Hedge)
http://www.zerohedge.com/news/sp-pre-announces-bank-christmas-massacre

Excerpt:

Reuters: S&P to update bank credit ratings within 3 weeks
http://www.reuters.com/article/2011/11/18/us-sp-bankratings-idUSTRE7AH0CI20111118

Standard & Poor’s plans to update its credit ratings for the world’s 30 biggest banks within three weeks and may well mete out a few downgrades in the process, possibly surprising battered global bond markets.

Among the institutions that could be downgraded are:

- Bank of America Corp
- Citigroup Inc
- Morgan Stanley

Some European banks could also be affected. On November 9th, S&P downgraded its scores for the health of the banking industries in a number of countries, including Denmark, Sweden, Finland and the Netherlands.

Earlier this month the agency published its final criteria and said it expects 60% of all bank ratings to stay as they are, while 20% will go up one notch, 15% will fall by one notch and less than 5% will drop by two or more notches.

S&P estimated in January that there would be more downgrades. The agency plans to first announce its results for the 30 biggest banks, possibly as early as late this month, and then begin quickly rolling out its ratings for smaller banks.

Tyler Durden: The impact of a downgrade can be very significant – aside from simply reducing investor appetite for risk (in its simplest form), it can trigger collateral calls and in a world where liquidity is hard to come by, and with the magnitude of funding (and rolling maturing debt) due over the next few quarters, we suspect this will be the catalyst for another leg down in equity prices as they snap back to credit’s reality.